EDPR NA Energy Insight
Hybrid Power Plants Gain Momentum in the Race to Curb Carbon Emissions
December 5, 2024
Renewable energy is the fastest growing source of power in the U.S. today. But will renewables offset the rising demand from crypto mining, data centers, artificial intelligence and EVs, while still achieving U.S. carbon-reduction targets? One way to help shore up the potential delta is through development of hybrid renewable energy plants.
The energy transition to date has been marked by important milestones. Wind and solar made up 10% of the electricity mix in 2019.1 By 2023, solar had outpaced every other form of new electricity generation.2 The majority of these plants include some form of energy storage, demonstrating the increased role hybrids are starting to have in powering the grid.3
The renewable trend of the 2020s seems destined to be the increased dominance of hybrid clean energy projects.
What is a hybrid renewable energy plant?
A hybrid power plant pairs at least one source of electricity generation (sometimes more) with energy storage, typically a large-scale solar project or wind farm with an onsite battery. Hybrid plants play a critical role in addressing energy intermittency, enabling a more stable and reliable energy supply, which is vital for integrating more renewable sources into the grid.
Batteries help smooth out production from wind and solar power, store excess power that would otherwise be wasted, and reduce congestion on the grid. The combination of renewable energy and batteries enables the hybrid plant to use stored energy when demand is strongest, such as summer afternoons when cooling costs are high.
One example is EDPR NA’s recently announced Scarlet Solar Energy Park in Fresno County, a hybrid project pairing 200 MW of solar with a 40 MW battery energy storage system (BESS) to provide enough clean energy to power the equivalent of 68,000 homes in California. The addition of the BESS enables the project to generate more power, more efficiently, and provides a level of security and reliability for the California grid.
Hybrid power plants are not new. Combined heat and power plants, for example, have been around for decades, and while they were typically natural-gas powered, their design helped lay the groundwork for the concept of hybridization of clean energy. Wind and solar systems have been co-located to take advantage of their complementary production profiles. But the missing link has been the energy storage and management capacity to enable these resources to work more seamlessly with each other, and with the grid.
Why Hybridize? Why Now?
The growth in hybrid power plants parallels advancements in wind and solar technology, particularly as battery technology has improved and costs have decreased. As of the end of 2023, there were 469 hybrid plants larger than 1MW operating across the United States, a 21 percent increase compared to the end of 2022. Of the 80 hybrids added in 2023, 66 were solar + storage.3
The majority of power plants applying to connect to the U.S. grid are now solar plus battery storage.
What’s behind the massive growth in hybrid power plants?
One reason for the rapid growth in hybrid plants is that the cost of solar has gotten low enough to make energy storage a good investment. In 2023, the levelized cost of electricity (LCOE) of solar PV was 56% less than the weighted average fossil fuel-fired alternatives. In 2010, solar PV was more than four times as expensive than fossil fuel alternatives.4
The addition of energy storage tax incentives through the Inflation Reduction Act provided the critical assurance to project developers that these capital-intensive assets would yield a lower cost of energy for offtakers over the long term.
Demand has also increased amongst retail customers and technology giants ranging from Google and Microsoft to Meta, looking to power their ever growing AI and data center footprints. The power needs of data centers is expected to triple the current capacity by the end of the decade, from between 3 and 4 percent of total US power demand today to between 11 and 12 percent in 2030, according to McKinsey. The additional generation must come from somewhere, and for most tech companies, the answer is increasingly renewable.
Advantages of Hybrid Plants
Reliability
Hybrid plants give utilities and energy offtakers the ability to run on clean energy 24/7. Solar plus storage (or wind + storage or solar + wind + storage) provides a level of reliability equivalent to if not better than other types of on-demand generation, such as natural-gas fired peaker plants, because the source of the energy is truly renewable. Hybrid systems not only ensure reliability but also contribute to US energy independence by utilizing domestic renewable resources.
Maximizing efficiency – and flexibility
Batteries provide power plant operators a level of flexibility and efficiency that was simply not possible with solar or wind operating independently. By storing excess power during peak production hours and deploying it during high-demand periods, hybrid systems optimize energy use and minimize waste.
Grid Stability
One of the key challenges to deploying more clean energy has been the uneven flow of wind and solar production to the grid. With the advancement of battery technologies and grid-management software, hybrid systems can now help balance load fluctuations and reduce strain on the grid by smoothing out the intermittency of renewable power.
Cost benefits
Hybrid systems can be less expensive to develop than standalone assets. Developing resources at the same site simplifies land rights and can reduce costs due to shared construction costs. Sharing an interconnection point on the grid can also cut down on permitting complexities, which often slow projects down.
Challenges to Deploying Hybrid Solutions
While hybrid power plants are growing rapidly, challenges remain. However, integrating multiple resources into the grid presents fundamental complexities, and ensuring seamless operation remains a significant challenge.
Advances in energy storage technology and AI-driven grid management tools are, increasingly, addressing these challenges. EDPR NA’s project for Mohave Electric Cooperative (MEC) is a case in point: The 23.27 MWdc ground-mount solar array system is coupled with a 15 megawatt (MW) / 60 megawatt-hour (MWh) BESS for the nonprofit coop in Arizona. The BESS is operated by Stem’s AI-driven clean energy optimization software, which monitors the system 24/7 and schedules dispatches on command into high-demand time periods. Various energy software providers offer solar management applications that provide solar forecasting, and advanced modeling through machine learning helps further streamline solar optimization.
The Future is Hybrid
Looking ahead, hybrid renewable energy projects are poised to become a mainstream solution for clean energy generation. Advancements in battery technology will continue to make the systems even more viable. Ironically, advancements in AI will not only demand more power from these resources but will enable a more seamless flow of electrons through the energy system, ultimately showing that as in all things in life, sometimes the answer lies in the very challenge you’re trying to solve.
Author
Disha Gupta, Clean Energy Expert
Citations:
- NRDC’s 8th Annual Energy Report: Slow and Steady Will Not Win the Climate Race, December 2, 2020
- US Energy Information Administration: Utility-scale U.S. solar electricity generation continues to grow in 2024, October 2, 2024
- Hybrid Power Plants: Status of Operating and Proposed Plants, 2024 Edition, Lawrence Berkeley labs, September 2024
- IRENA, Renewable Power Generation Costs in 2023, https://www.irena.org/Publications/2024/Sep/Renewable-Power-Generation-Costs-in-2023
- A review of hybrid renewable energy systems: Solar and wind-powered solutions: Challenges, opportunities, and policy implications, Science Direct, Results in Engineering, Volume 20, December 2023.